China's legal system is closer to
a Civil Law System than a Common Law System as
its creative law-making is undertaken by legislature,
not by judges. In the past few decades many pieces
of law have been enacted covering contract, labor,
intellectual property, foreign exchange control,
customs, taxation, banking, consumer protection,
bankruptcy, dispute resolution etc.

In China's court system, there are
four levels hierarchically. At local county or
district level is the basic people's court. At
municipal level, there are intermediate people's
courts, and at the provincial level is the higher
people's court. At the top, is the supreme people's
court. If a foreigner is involved in a legal dispute,
he or she can take the matter to an intermediate
people's court at municipal level or above.

Chinese people are relying more and
more on laws to govern their civil and commercial
activities as legal concepts become more understood.
Nowadays, enacted legislation, courts, arbitration
commissions and private law firms play dominant
roles in resolving civil and commercial disputes
in China.

Foreign-Related
Legal Matters

If foreigners run into legal troubles in China,
they should contact their embassies or consulates
in China for assistance. If foreign investors
are involved in legal disputes, they should contact
their lawyers in their home country and in China
for legal advice.

Over 100 foreign law firms had received
permits to open offices in China by 1999. Most
of these foreign law firms are in Beijing or Shanghai
and mainly focus on civil and commercial matters.
Foreign lawyers are not permitted to act on behalf
of their clients in the people's courts, but they
are permitted to act on behalf of their clients
in the arbitration proceedings of an arbitration
commission. In addition, parties can appoint foreigners
as their arbitrators. The proceeding can be conducted
in a foreign language as well. For instance, the
proceedings of the China International Economic
and Trade Arbitration Commission can be conducted
completely in English or any other foreign language
chosen by the parties. Interpreters and translators
may not be necessary in foreign language arbitration
proceedings. From these points of view, it is
advisable to take your disputes to an arbitration
commission or a conciliation center for resolution
rather than taking the matter to a court.